Defeat at Anfield would leave the champions, who finished Saturday in fourth place, languishing nine points adrift of the Reds with only 12 games of the season gone.
City re-ignited their title chase with victory against Jurgen Klopp’s team last season, digging out a 2-1 win in January when defeat would have left them 10 points adrift.
And the Germany international thinks there will still be life in his team, even if Liverpool win to extend their lead at the top.
“There are so many games still to play,” said Gundogan. “If Liverpool win, people will talk about how nine points is too many. If we win, people will say it's the start of the same charge we made last season when we overturned a big points difference to win the title.
“The truth is that it is far too early to tell. We have six months left to play in the most competitive league in the world and it just isn't possible to predict every result between now and the end of the season - just as people wouldn't have predicted every result so far.
“Only one point separated us last season and so it would be wrong to suggest that the result won't be important but it doesn't become more important than when we face Chelsea or Newcastle later in the month just because the spotlight is on this game.”
City looked set to cut the gap on Liverpool last time out when they came from behind to beat Southampton.
But the Reds put in a late recovery of their own, with Sadio Mane scoring in stoppage time as they secured a last-gasp win against Aston Villa.
“Liverpool are currently top of the league, but our fans know that we fight to the end, every game, every season; some of the club's greatest moments have come about this way, and so Sunday will be important, but nothing is decided in November.
“Not many players will have the opportunity to play for both managers and so this is something I am very proud of,” said the Germany international, who played under Klopp at Borussia Dortmund.